The Binance exchange’s regulated buy-and-sell cryptocurrency section, Binance Connect, will shut down on August 16.
On the BNB Chain-based decentralized exchange Biswap announced simultaneously that Binance had “ made a difficult decision to disable Binance Connect. This action by Binance highlights the ever-evolving nature of the cryptocurrency environment and its stakeholders.
Dear Biswappers,
The Biswap team keeps abreast of the latest DeFi news and aims to inform you right away.
After a thorough consideration, @binance has made a difficult decision to disable @Binance_Connect on 15 August due to its provider closing the supporting card payments… pic.twitter.com/HcooyLn4sg
— Biswap (@Biswap_Dex) August 15, 2023
The spokesperson for Binance said “At Binance, we examine our goods, and services on a regular basis to make sure that our resources are still concentrated on key initiatives that are in line with our long-term plan. Since its founding as an exchange six years ago, Binance has developed into a multifaceted global blockchain ecosystem. In response to shifting consumer demands and market conditions, we continuously adapt and adjust our business strategy.
Binance Connect was first introduced as Bifinity on March 7. 2022, and served as a source of fiat-to-crypto payments, enabling linkages between cryptocurrency businesses and the mainline financial system. Upon launch, the site supported 50 cryptocurrencies and provided a number of fiat payment options, including Visa and Mastercard.
Bifinity’s $36 million loan to Eqonex alarmed the UK’s Financial Conduct Authority (FCA). FCA raised concerns over potential implications. The FCA pointed out that shareholders of Binance Group could be seen as beneficial owners of Eqonex. Binance Group operates beyond UK regulation.
Binance Connect: A Closing Chapter Amid Regulatory Challenges and Legal Disputes
Additionally, Binance Connect served as the self-custody Trust wallet’s on-ramp from fiat to cryptocurrency. The revelation comes after Binance Australia’s earlier month suspension of fiat services due to problems with a third party. German officials turned down Binance’s request for a crypto custody license in June. However, in July, authorities in Dubai granted Binance a crypto broker-dealer license, marking a significant advancement.
Despite achieving success, Binance remains entangled in legal disputes. Both the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are suing the exchange today over claims that it ran an unregulated exchange within the United States.
This development, which comes as Binance Connect prepares to cease operations, emphasizes the continuous difficulties and regulatory scrutiny faced by cryptocurrency exchanges in a setting market by rapid technological advancement and shifting legal frameworks. As the business develops, the decision also serves as a reminder of the necessity for flexibility and compliance.
